22. Charles Davidson on kleptocracy, beneficial ownership and reputation laundering

KickBack - The Global Anticorruption Podcast

New year This week on KickBack: Charles Davidson former Executive Director of the Kleptocracy Initiative at Hudson Institute, Publisher & CEO of The American Interest Magazine. The interview covers how the book Capitalism's Achilles Heel by Raymond Baker inspired Charles’ impressive work. For example Charles was involved in: - together with Francis Fukuyama founding of American Interest Magazin: https://www.the-american-interest.com - initiating the think tank, “Global Financial Integrity”: https://gfintegrity.org/ - creating the “The FACT Coalition” which brought together organizations become an activist coalition on issues of corporate transparency. A legislative influence group tackling against beneficial ownership: https://thefactcoalition.org/ - serving as an executive producer of the movie “We are not broke”, that premiered at Sundance festival: https://werenotbrokemovie.com/ The interview pursues on more details on beneficial ownership, how International crime and kleptocracy have become an increasing threat to democracy, and the push for greater corporate transparency in the US, spurred by the #PanamaPapers. Charles chimes in on the concrete proposal of beneficial ownership registries, how it might depend on the style of capitalism in a given society, outlining that that an important prerequisite consists of law enforcement agencies having access. Charles outlines how the essential element of transparency around beneficial ownership would be making the data available for governments yet also outlines that publicly available information facilitates the work of journalists. The next segment deals with the details around kleptocracy and how it is linked to authoritarian regimes. The basic model across several countries is: The regime loots resources at home and then take the money out and store it in the west (using anonymous companies etc.) to safeguard their money, leading the US to become increasingly kleptocratized. Charles outlines the importance of understanding that “The fact that we welcome authoritarian money into the west, means that we are incentivizing authoritarianism.” The two discuss the challenges of preventing kleptocracy and how the Magnitsky act (https://en.wikipedia.org/wiki/Magnitsky_Act) might provide a first step into that direction. The two describe how corruption for the effectiveness of development aid. Finally, the interview covers the concept of reputation laundering, which describes how gifts and donations to educational institutions or museums by oligarchs intend to uphold a positive reputation towards oligarchs. The two unpack the typical step-by-step process for reputation laundering and discuss how universities can protect themselves from such influence. Online Articles: Human Rights Watch: “The Anniversary that Shouldn't Be: 40 Years of President Obiang in Equatorial Guinea “ https://www.hrw.org/news/2019/08/03/anniversary-shouldnt-be-40-years-president-obiang-equatorial-guinea The Guardian: “Son of equatorial guineas president convicted of corruption in France” https://www.theguardian.com/world/2017/oct/27/son-of-equatorial-guineas-president-convicted-of-corruption-in-france Books: Raymond W. Baker - Capitalism's Achilles Heel: Dirty Money and How to Renew the Free-Market System https://www.wiley.com/en-us/Capitalism%27s+Achilles+Heel%3A+Dirty+Money+and+How+to+Renew+the+Free+Market+System-p-9780471644880